Compute the income elasticity of demand for product below, Ask an Expert

Economics

Calculate the income elasticity of demand for the product below, using average values for incomes and quantities.

Quantity of video tape recorders per year	Per capita annual group income
1000	$15000
2000	20000

a. Is the demand for this product income elastic or inelastic?

b. Would you consider this commodity a luxury or a necessity?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9163409

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